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February - March 2009

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Working together in Difficult Times - The Future of Business with India

Key messages from the Inaugural Seminar - Aston India Foundation for Applied business research

The inaugural seminar of ‘the seminar series on India’ was attended by approximately 90 colleagues from different industries. Below are key excerpts from the speeches of all the speakers.

Professor Helen Higson, Pro-Vice-Chancellor for International Relations, Aston University

Professor Higson chaired and introduced the seminar series. Apologies were conveyed from Professor Graham Hooley, Deputy Vice-Chancellor, Aston University and Professor Michael West, Executive Dean, Aston Business School, who were unable to make it due to ill health.

Prof. Pawan Badhwar, Director, Aston Inia Foundation with other participants

Professor Higson stated that the Foundation aims to communicate latest knowledge, foster collaborative links and encourage the adoption of best practice in research between British and Indian organisations. Operating within the global economy, particularly with present challenges, the example of successful partnerships showcased at the seminar between key stakeholders typifies the activities, which will be vital to the economies of both the countries. Aston Business School is proud to be in the forefront of research and development in Indo-British partnerships through the work of the Foundation and other groups in the School.

Professor Julia King CBE, FREng, Vice Chancellor, Aston University

Professor King stated that it is highly appropriate for Aston to launch this seminar series, especially now, because of the increasing business between India and the West Midlands and the economic difficulties that affect both parties. It is particularly important in the current financial climate that we all focus on innovation and collaboration to help us out of the recession.

Professor King said that India’s economy has been growing at a rate of 6-8% every year for the last few years and is now the 12th largest economy in the world and 5th largest on purchasing power parity basis. There are predictions that it will overtake the UK as the 5th largest economy within the next ten years and will be the 3rd largest economy behind China and the USA by 2025. Trade between the UK and India was worth about £8.7bn per year, and it is growing about 10% annually. The number of Indian companies in the West Midlands has doubled since 2006, with more than 30 Indian owned businesses now operating in the region, including prominent names such as Tata; Birla Group; ICICI Bank, Mahindra & Mahindra and State Bank of India.

There is therefore a huge and growing potential for West Midlands businesses, even ones without ethnic connections, to develop links with Indian counterparts. India offers great expertise in the service industry and provides opportunities to combine West Midlands skills and capabilities with Indian cost advantages.

The opportunities available also present challenges for both West Midlands and Indian businesses. It is particularly apt for this seminar series being initiated at Aston since developing business, commercial and technological relationships between India and the West Midlands is precisely where Aston has interest and expertise. Professor King envisages this series becoming a forum bringing together business people and researchers in the West Midlands as well as to bring in outstanding contribution from across the UK, India and elsewhere. The series will help researchers to ensure that their work is relevant and enhance its quality and relevance.

Professor Pawan Budhwar, Director of the Aston India Foundation and Head of Work & Organisational Psychology Group, Aston Business School

Professor Budhwar stated that given the key developments in the Indian economy and increased linkages between the two countries, it is timely to develop business partnerships, research projects and consultancy activities with India. At Aston, there is a wonderful team of colleagues working on research on India for a long time – up to 15 years in some cases. They are working in diverse areas on projects with a specific focus on India, with Indian partners – for example, in business related areas such as people management, marketing, FDI, project management, supply chain management, and in scientific areas such as bio-technology and bio-energy. It is competencies like these that enable Aston to create a centre such as the Aston India Foundation.

The Aston India Foundation has a number of stakeholders such as Birmingham City Council, Locate Birmingham, Chambers of Commerce and Industry, IPTU, Advantage West Midlands, the India Consul General at Birmingham’s office and many others. All organisations interested in developing business relationships between the UK and India are encouraged to become involved with the Foundation. It will provide a platform on which we can have interesting, creative and constructive dialogue and a regular exchange of information.

The mission of the Foundation is to continue with our research and create cutting edge knowledge, which is useful to businesses; and to disseminate this information through channels such as the seminar series, publications, conferences and other activities.

The objectives of the Foundation are: in the short term, to raise the profile of the Aston India Foundation; in the medium term, to build on current activity to attract more funding and increase the research team; and ultimately, to establish Aston as a recognised centre of excellence related to India research and activities.

Mrs Jordana Diengdoh Pavel, Consul General of India at Birmingham

Mrs Pavel said that the launching of this seminar series provides an opportunity to reflect on initiatives that have been undertaken so far by key players in promoting business between Birmingham and India. Looking ahead, it will also be important in enabling businesses to identify synergies, and to co-operate for mutual benefit.

The consulate has been consulting with Aston University in order to find the most viable and best option to co-operate and we felt that Aston Business School was the perfect choice for an India business research centre. The School’s reputation for high quality business research makes it an important centre where useful studies could be conducted on emerging themes and business applications that are related to India, so that its stakeholders can apply the knowledge to their productivity and profitability.

Since 2002, there has been a rapid expansion in the number of British nationals going to India. The UK is now India’s fourth largest trading partner and the largest cumulative investor in India. Equally, India is one of the biggest investors in projects in the UK and on the London Stock Exchange. Many companies, as exemplified by the Tata acquisition of Jaguar Land Rover, are looking towards Birmingham and the West Midlands for more fruitful co-operation.

To keep pace with these developments, visa services in the Indian consulate have now been outsourced in order to improve the service to customers and enhance relations with business and tourism. The consulate on average issues between 900 and 1000 visas per day. Although the consulate does not have an economic or commercial role, it has joined forces with numerous stakeholders in the region that are interested in business links between the West Midlands and India.

Mike Loftus, Manager, Locate Birmingham

Mike Loftus advised that Locate Birmingham is the city’s investment arm where Birmingham is promoted as a place to do business in and from, working nationally and internationally to market the city. The organisation also provides information on Birmingham as a business location in terms of people, labour, skills, communications, property – all the things any relocating business would need. Locate Birmingham also works with businesses who are going through the process of deciding which location is best for them. This is one of the most exciting parts of the job. The organisation also works with businesses once they are here, to ensure that the reality matches the expectation we create in our marketing activities, and to establish long term relationships with these important investors. A key part of this work is to build partnerships with key contacts in the city, including universities, who increasingly are leading the way with their excellent reputation.

Locate Birmingham does engage with India. It has been noticeable that changes in India in micro economic management and global engagement began more recently than China but the progress has been much more rapid. UK companies are realising the complexity and diversity of the sub-continent. This seminar series helps us to demystify some of those aspects, and develop a much greater understanding of the opportunities available. The research, investigations, contacts and connections that the series provides will give us a much better sense of India and how we can engage better.

Jonathan Webber, Head of International Trade, Birmingham Chamber of Commerce and Industry

Jonathan Webber advised that Birmingham Chamber of Commerce and Industry has one of the largest UK International Trade teams that look into UK trade and investment. The organisation works with World Bank, the United Nations and NATO. About 60% of work is completed online. The India Pakistan Trade Unit (IPTU) covers India, Pakistan, Bangladesh and Sri Lanka. It is the largest two-way trade and investment portal and service in the world – and it’s free between South Asia and UK. It receives around 250,000 hits a day.

The Unit arose from a realisation over three years ago that it was difficult to find information about UK-India business opportunities. The Chamber therefore decided to put it all together on an online portal. The IPTU is extremely well networked across the Indian sub-continent and has excellent local links with numerous public sector organisations, including universities.

In the past two years, the Chamber has taken ten trade visits to India and Pakistan, with a further three planned before March 2009. It is involved in substantial EU projects in Bangladesh, Pakistan and Nepal. In the near future, the IPTU will be launching a South Asia business partner search and complete re-design of the India section to reflect the federalised working environment – you can not just deal with India, it is a continent.

There is now a website called which is for universities so that they can co-ordinate projects, capitalise on research opportunities and reduce duplication of work.

David Bell, Global HR Director, JCB

JCB entered the Indian market in 1991 in a joint venture with Escorts. JCB India was established in 2004 and since then the company has built plants and centres in Pune, where it has also adopted a village as part of its corporate social responsibility agenda.

Mr Bell indicated that the employment laws in India are very different from the UK. For example, making people redundant is a massive challenge in India. There are also strict rules governing the employment of temporary workers. Labour Office and local officials play a major part in Industrial Relations. Disputes can quickly become violent.

In India, there is currently a talent shortage despite there being many graduates. This is due to a high growth rate and a wide variance in capabilities. Wage rates are spiralling and pay structures are very complicated. The Unions are very strong and can have substantial ‘outside influence’, especially in old, established operations.

Status is very important at various levels of management. Employee culture is quite different to the UK. Quality benchmarks are not the same, though this is changing rapidly. Employee turnover is high – 15-20%. In order to retain staff, international experience, learning and development programmes are important to keep staff motivation high.

Mr Bell believes that some of the most talented and gifted individuals work in India. They are ambitious and dedicated. JCB India is most certainly one of the jewels in the JCB crown.

Aakash Desai, Assistant General Manager, ICICI Bank

ICICI is the largest private sector bank in India, but up until 2002 it was fairly domestic with no real overseas presence. Mr Desai cited three primary reasons for ICICI to go overseas: to cater to the needs of the Indian diaspora; to develop its corporate acquisitions; and to tap the local opportunities in each market.

It launched a UK subsidiary in November 2004 with a long term strategic view to become the bank of choice for Indians in the UK, and to act as a hub for European operations. As part of this plan, ICICI provides banking services for Indians, remittance services, an online trading portal, mortgages and needs-based local deposit accounts in India.

To enter the UK, ICICI looked to establish a niche, and capitalise on its core competencies – low operating costs due to a substantial back office operation and superior customer service. The bank is strategic partner with Lloyds, and has India desks in 100 Lloyds branches.

ICICI also pursues a corporate banking strategy linked in with Indian businesses such as Tata, Ambani and Birla. It is the market leader in advisory, financing and syndication of Indian cross border mergers and acquisitions.

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